Discussions Continue on Nursing Home Capital

With discussions continuing on Medicaid nursing home capital reimbursement under managed care, DOH is signaling an interest in continuing the current methodology and requiring managed care plans to pass through the capital component. LeadingAge New York has been strongly advocating for continuing the current methodology and ensuring that capital payments are made at the fee-for-service amounts under managed care. We have also argued for a streamlined process for approving facility requests to refinance existing higher rate mortgages.

Several months ago, DOH convened a capital workgroup made up of LeadingAge NY and other associations to discuss nursing home mortgage refinancings and potential changes to the capital reimbursement methodology. The group made several recommendations on how to expedite refinancing reviews, and several recommendations were made on whether to keep the current historical cost capital reimbursement methodology, to modify the current methodology or to move to an entirely new approach such as fair rental. DOH signaled at the last workgroup meeting that they are inclined to remain with the current methodology but to make changes to streamline Medicaid rate setting activities since capital is the most time-consuming part of the rate to administer.

DOH is also finalizing a policy paper on the transition of the Medicaid nursing home population to managed care, which is slated to begin downstate as early as March 1, 2014. In the latest draft of the paper, DOH suggests that nursing homes would continue to receive the capital component of the rate as a “guarantee.” Under this process, DOH would calculate the capital component of the rate and contractually require the managed care plans to pay this rate to nursing homes in their network. A capital pool could be established to ensure that managed care plans are not disproportionately impacted by contracting with nursing homes that have larger capital component amounts. This proposal is subject to CMS approval.

Contact: Dan Heim, dheim@leadingageny.org, 518-867-8866